Annual Financial Report

LONDON--(BUSINESS WIRE)--

17 January 2012

Media Corporation plc

(“Media Corp” or the “Group”)

Final Results for the Year Ended 30 September 2011

Media Corporation plc, a leading AIM quoted media and online gaming group, is pleased to announce its audited results for the year ended 30 September 2011.

Highlights

Financial highlights

• Group Revenue of £35m ( 2010: £ 24m) an increase of 46%
• Gross Profit of £5.7m (2010: £5m) an increase of 14%
• Operating loss before exceptional costs £1.38m (2010:£1.40m)
• Exceptional costs of £1.4m, resulting in an operating loss of £2.9m (2010: £1.4m)
• Adjusted EBITDA * Loss £0.98m ( 2010: Loss £1.20m)
• Cash Balances at the year-end of £2m (2010: £2.2m)
• Wholly owned subsidiary Purple Lounge revenues of £27.5 million (2010: £21.3 million) an increase of 29%
• Wholly owned subsidiary Eyeconomy revenues of £7.3 million (2010: £2.8 million) an increase of 160%

*"Adjusted EBITDA" (Adjusted net income before interest income, exceptional costs, provision for income taxes expense, depreciation and amortization and gaming software levy)

Operational highlights

• Purple Lounge achieved significant revenue growth during the year with registered customer numbers reaching 120,000 (2010: 100,000) by the year end
• Eyeconomy signed a partnership deal with Digital Sports Group adding a further 150 million monthly impressions and doubled the scale of Eyeconomy's exclusive site representation business from August 2011
• Eyeconomy signed an extension to its contract with Express Newspapers in December 2011
• The sale of Gambling.com and Sport.co.uk for £1.5m net during the financial year

The Directors continue to consider appropriate bolt on, profitable and cash generative acquisitions, particularly in the online gaming arena.

Commenting on the results, Justin Drummond, Chief Executive, of Media Corp, commented:

“This is another year of impressive growth for Media Corp, where the Group has made progress across all of its key financial metrics. The Group’s wholly owned subsidiaries, Purple Lounge and Eyeconomy have made considerable progress during the year, with Purple Lounge adding 20,000 new customers and Eyeconomy achieving a number of new client wins and supplier contracts. The Group will continue to pursue organic growth and seek further earnings enhancing acquisitions during the 2012 financial year”

The full report and accounts for the period ended 30 September 2011 together with the notice of annual general meeting (to be held 11am on 16 February 2012 at the offices of Northland Capital Partners Limited, 60 Gresham Street, London, EC2V 7BB) will be forwarded to the registered shareholders of the Company. A further announcement will be made when the report and accounts has been posted.

Notes to editors:

Quoted on the AIM market of the London Stock Exchange, Media Corp is a leading online gaming and media group.

The Group has two principal divisions:

Online Gaming – Media owns Purple Lounge, www.purplelounge.com a leading European online poker casino operator. With over a 120,000 registered customers, Purple Lounge provides an excellent user experience through a combination of the latest technology and best in class customer service.

Advertising Network – Eyeconomy specialises in mass reach campaigns to up to 50 Million unique consumers per month via its own proprietary ad-serving and tracking technology for clients including AOL, Dell and American Express, www.eyeconomy.co.uk

Further information can be found on the company's website, at www.mediacorpplc.com

Chairman's Statement

The Group grew revenues considerably during 2011, and continues the stated aim of restoring profitability. Eyeconomy, the Group’s wholly owned advertising network had an excellent year with record revenues and returned to profitability. Purple Lounge has demonstrated significant growth in both revenues and player numbers.

The Group operating loss includes £0.225m increased costs in relation to some of its software suppliers/ gaming levy; these costs will reduce substantially in the next financial year.

As announced during the year, the Group successfully completed the sale of some of underperforming publishing assets, namely Gambling.com and Sport.co.uk for a net amount of £1.5million. Both of these businesses had been loss making for some time and the completion of the sales will reduce costs going forward and contribute to a return to profitability for the Group.

During the current financial year there has, overall, been a marked improvement in both Company specific and wider market conditions and in particular we have benefited from a very strong performance from Eyeconomy. We continue to feel very positive about the outlook and we look forward to providing further updates during the course of the year.

Jason Drummond

16 January 2012

Business review for the year ended 30 September 2011

Throughout 2011, Media Corporation continued consolidating its on-going strategy of investing in the Group’s growth and streamlined costs within the business. This investment resulted in revenue growth and more efficient operations with a significantly reduced cost base during the financial year.

The Group now has three principal divisions: Internet Gaming, Advertising Network and Internet Publishing:

Internet Gaming

Purple Lounge is an internet gaming company which was established in 2005 with a gaming licence in Malta. Purple Lounge was acquired during the 2010 financial year and the Group used its in-depth expertise in developing and monetising the brand which offers poker, card and casino games.

Advertising Network

The Advertising Network business, Eyeconomy, was established in 1996 and is a separate operating division of Media Corporation. Eyeconomy specialises in online media planning as well as buying and managing online media campaigns for clients including AOL, Dell, T-Mobile and American Express.

The division currently:

• produces dynamic and engaging online advertising solutions and has recently launched a new online advertising division
• offers clients access to 50 million unique users every month, from over 850 quality host sites in all major channels including Finance, Travel, Motors, Sport, Male/Female, Student/Youth, Property, Entertainment, Film, Music and TV, Mobile/Gadget and Recruitment
• produces in-house creative media
• boasts a brand team whose successful contract wins include the Express Newspaper Group
• is seeing strong ROI on an increasing market presence

Internet Publishing

Media Corporation has a diverse publishing division specialising in premium destinations and portals.

Our impressive portfolio of websites includes a number of market-leading sites including Onthebox.com (UK’s definitive TV listings and entertainment guide with over 2 million unique visitors per month, Flightcomparison.co.uk (a leading flight booking portal and Creditcardexpert.co.uk (a credit card comparison website).

Financial Overview

The audited results for the year ended 30 September 2011 show increased revenues in line with the Company’s growth strategy, with total Group revenues £35.1m (2010: £24.3m). The gross profit increased by 14% to £5.7m (2010: £5m) and the cash at the end of the financial year was £2m (2010:£2.2m). The operating loss includes £0.225m increased costs in relation to some of its software suppliers/ gaming levy; these costs will reduce substantially in the next financial year. The exceptional losses, as previously communicated in April 2011 were primarily down to the sale of gambling.com, a non-cash item relating to the write-down of goodwill.

Key Performance Indicators (KPI’s)	FY2011	FY2010
	£million	£million
Revenue – Continuing Operations	35.1	3.0
Revenue – Acquired Operations	-	21.3
Total Revenue	35.1	24.3
Gross Profit	5.7	5.0
Operating Loss before exceptional costs	(1.4)	(1.4)
Operating Loss after exceptional costs**	(2.9)	(1.4)
Net Assets	2.7	5.6
Cash	2.0	2.2
Other non-financial KPI
Employees - Number	37	38

**Non-cash item

Current trading and prospects

The Board is aiming for continued growth during 2012, as we seek to maximize the potential of the Group’s Internet Gaming, Publishing and Advertising businesses and is targeting a return to profitability. It is the Board’s strategy to focus on the online gaming and there will continue to be considerable opportunities to reduce fixed costs in the short term as well as exciting organic and acquisitive growth prospects.

Justin Drummond Nilesh Jagatia

Chief Executive Group Finance Director

Consolidated Income Statement for the year ended 30 September 2011
		Total		Total
	Notes	2011		2010
		£000		£000
Revenue
Acquisition during the year		-		21,266
Continuing operations		35,145		2,985
Total revenue		35,145		24,251
Cost of sales
Acquisition during the year		-		(17,161	)
Continuing operations		(29,416	)	(2,057	)
Gross profit		5,729		5,032
Selling and distribution costs		(3,801	)	(3,118	)
Selling and distribution gaming software levy		(225	)	-
Administrative expenses		(3,316	)	(3,318	)
Total Operating costs		(7,342	)	(6,436	)
Operating loss before Exceptional Costs		(1,378	)	(1,404	)
Exceptional loss		(1,488	)	-
		(2,866	)	(1,404	)
Operating loss after Exceptional Costs
Finance income		1		6
Loss before income tax		(2,865	)	(1,398	)
Income tax expense		-		-
Loss from continuing activities attributable to equity holder of the company		(2,865	)	(1,398	)
Loss earnings per share attributable to equity holders of the company	6	Pence per share		Pence per share
Basic		(0.87p	)	(0.43p	)
Diluted		(0.88p	)	(0.43p	)

The Company has elected to take exemption under section 408 of the Companies Act 2006 to not present the parent Company income statement. The loss for the Company is shown in the Statement of changes in shareholders’ equity.

Balance Sheets as at 30 September 2011
		Group		Group		Company		Company
		2011		2010		2011		2010
	Notes	£000		£000		£000		£000
Assets
Non current assets
Property, plant and equipment		18		44		16		47
Intangibles		3,038		6,073		74		209
Investments		191		188		6,532		6,532
Deferred tax asset		-		-		-		-
		3,247		6,305		6,622		6,788
Current assets
Trade and other receivables		913		670		2,642		2,585
Cash at bank and in hand		2,032		2,153		1,119		276
		2,945		2,823		3,761		2,861
Total assets		6,192		9,128		10,383		9,649
Liabilities
Current liabilities
Trade and other payables		(3,495	)	(3,440	)	(2,835	)	(1,272	)
Current tax liabilities		-		-		-		-
		(3,495	)	(3,440	)	(2,835	)	(1,272	)
Total liabilities		(3,495	)	(3,440	)	(2,835	)	(1,272	)
Total assets less liabilities		2,697		5,688		7,548		8,377
Equity
Share capital	7	5,088		5,088		5,088		5,088
Share premium		13,118		13,118		13,118		13,118
Other Reserves		1,422		1,422		1,422		1,422
Translation reserve		368		497		-		-
Retained Earnings		(17,299	)	(14,437	)	(12,080	)	(11,251	)
Total shareholders equity		2,697		5,688		7,548		8,377

The financial statements were approved by the Board on 16 January 2012 and were signed on its behalf by:

Justin Drummond Nilesh Jagatia

Chief Executive Officer Group Finance Director

Consolidated Statement of changes in shareholders’ equity for the year ended 30 September 2011
Group	Share capital	Share premium	Currency translation reserve		Other reserves	Retained earnings		Total
	£000	£000	£000		£000	£000		£000
At 30 September 2008	4,773	12,927	(305	)	1,422	(10,924	)	7,893
Loss for the year	-	-	-		-	(2,645	)	(2,645	)
Share based payments	-	-	-		-	27		27
Currency translation differences	-	-	841		-	-		841
Purchase of own shares	-	-	-		-	(222	)	(222	)
Issue of shares	25	16	-		-	-		41
At 30 September 2009	4,798	12,943	536		1,422	(13,764	)	5,935
Loss for the year	-	-	-		-	(1,398	)	(1,398	)
Share based payments	-	-	-		-	6		6
Currency translation differences	-	-	(39	)	-	-		(39	)
Sale of own shares	-	154	-		-	719		873
Issue of shares	290	21	-		-	-		311
At 30 September 2010	5,088	13,118	497		1,422	(14,437	)	5,688
Loss for the year	-	-	-		-	(2,865	)	(2,865	)
Share based payments	-	-	-		-	3		3
Currency translation differences	-	-	(129	)	-	-		(129	)
Sale of own shares	-	-	-		-	-		-
At 30 September 2011	5,088	13,118	368		1,422	(17,299	)	2,697

Parent Company Statement of changes in shareholders’ equity for the year ended 30 September 2011
Parent company	Share capital	Share premium	Other reserves	Retained earnings		Total
	£000	£000	£000	£000		£000
At 30 September 2008	4,773	12,927	1,422	(9,766	)	9,356
Loss for the year	-	-	-	(923	)	(923	)
Other adjustments	-	-	-	(5	)	(5	)
Purchase of own shares	-	-	-	(222	)	(222	)
Share based payments	-	-	-	27		27
Issue of shares	25	16	-	-		41
At 30 September 2009	4,798	12,943	1,422	(10,889	)	8,274
Loss for the year	-	-	-	(1,087	)	(1,087	)
Share based payments	-	-	-	6		6
Sale of own shares	-	154	-	719		873
Issue of shares	290	21	-	-		311
At 30 September 2010	5,088	13,118	1,422	(11,251	)	8,377
Loss for the year	-	-	-	(829	)	(829	)
Share based payments	-	-	-	-		-
Sale of own shares	-	-	-	-		-
Issue of shares	-	-	-	-		-
At 30 September 2011	5,088	13,118	1,422	(12,080	)	7,548

Consolidated statement of recognised income and expenses for the year ended 30 September 2011
	2011	2010
	£000	£000
Currency translation differences	(129)	(39)
Total income recognised directly in equity	(129)	(39)
Loss for the year	(2,865)	(1,398)
Total recognised expense for the year	(2,994)	(1,437)

All amounts attributable to equity holders of the company

Consolidated Cash Flow Statement for the year ended 30 September 2011
	2011		2010
	£000		£000
Operating activities
Operating loss	(1,378	)	(1,404	)
Depreciation and amortisation	186		201
(Increase) / decrease in receivables	(243	)	5
Increase in payables	55		2,080
Other cash movements	(49	)	58
Taxes paid	-		15
Share based payments	-		6
Net cash used in operating activities	(1,429	)	961
Investing activities
Interest received	1		6
Purchase of property, plant and equipment	(5	)	(27	)
Purchase of intangibles	(161	)	(171	)
Disposal of Domain names -net sales proceeds	1,515		-
Acquisition of subsidiary undertaking - Net Assets	-		(2,017	)
Acquisition of subsidiary undertaking -net cash acquired	-		827
Net cash used in investing activities	1,350		(1,382	)
Financing activities
Issue of share capital from exercised warrants	-		278
Sale /(purchase) of treasury shares	-		719
Net cash used in financing activities	-		997
Net decrease in cash and cash equivalents	(79	)	576
Cash and cash equivalents at beginning of period	2,153		1,697
Effects on exchange movements	(42	)	(120	)
Cash and cash equivalents at end of period	2,032		2,153

Notes to the Financial Statements for the year ended 30 September 2011

1. General Information

Media Corporation plc (“the Company”) and its subsidiaries (together “the Group”) is engaged in Internet advertising, internet gaming and internet publishing. The Company is a public limited company which is listed on the AIM Market of the London Stock Exchange and is incorporated and domiciled in the United Kingdom. The address of the registered office is No1 Poultry, London EC2R 8JR.

The registered number of the Company is 4058698.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates. Media Corporation has the following subsidiaries:

Name of Company	Proportion Held	Class of shareholding	Nature of Business
Subsidiary undertakings
Xworks Limited	100%	Ordinary	Internet Publishing
Eyeconomy Limited	100%	Ordinary	Internet Advertising
Search Focus Limited *	100%	Ordinary	Internet Publishing
Newbold Publications Limited *	51%	Ordinary	Internet Publishing
Result Online Limited	100%	Ordinary	Internet Publishing
Flight Comparison Limited	100%	Ordinary	Internet Publishing
Purple Lounge Limited	100%	Ordinary	Internet Gaming
Purple Lounge (Malta ) Limited **	100%	Ordinary	Internet Gaming
Purple Lounge N.V. *	100%	Ordinary	Internet Gaming
Career Plus Limited	100%	Ordinary	IT recruitment agency
Interactive Consulting Limited /TA Nash Digital	100%	Ordinary	Internet Advertising
Gaming Corp(Curacao) Limited***	100%	Ordinary	Internet Publishing
Gambling.com Limited *	100%	Ordinary	Dormant

The holder of the minority interest in Newbold Publications Limited is not liable for the losses incurred. Therefore no amount is attributed to the minority interest in the financial statement.

Most of the subsidiaries above are incorporated in England and Wales, except for

* Jersey

**Malta

***Curacao

2. Financial Information

The financial information relating to the year ended 30 September 2011 set out in this announcement does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006, but has been extracted from the statutory accounts, which received an unqualified auditors' report and which have not yet been filed with the Registrar of Companies. The financial information relating to the period ended 30 September 2010 is extracted from the statutory accounts, which incorporated an unqualified audit report and which has been filed with the Registrar of Companies.

3. Accounting policies

Basis of preparation

The annual report and accounts of Media Corporation plc have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretations, the Companies Act 2006 applicable to companies reporting under IFRS and the AIM listing rules. The annual report and accounts have been prepared under the historic cost convention as modified by available for sale financial assets and financial assets and financial liabilities at fair value through profit or loss.

The annual report and accounts have been prepared on a going concern basis in accordance with the Group’s accounting policies set out below which are based on the recognition and measurement principles of IFRS.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are shown below.

Fundamental accounting concept – going concern

The financial statements have been prepared on the assumption that the Group is a going concern. The accounts of the Group for the year ended 30 September 2011 show a loss including exceptional items for the year of £2.9 million.

At the date of these financial statements the Group’s ability to continue as a going concern reflects the net funds of £2 million cash available to the Group at the year end and the forecasts for the Group for the current financial year. On this basis, in the opinion of the Directors, the financial statements have been properly prepared on the assumption that the Group is a going concern.

Basis of consolidation

Subsidiaries

Subsidiaries are all entities over which the Group (directly or indirectly) has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are excluded from the consolidation from the date on which control ceases.

The Group uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement for the year.

Intra-group transactions, balances and unrealised gains on intra-group transactions are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries’ accounting policies have been changed where necessary to ensure

consistency with the policies adopted by the Group.

Transactions and Minority Interests

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests result in gains and losses for the Group that are recorded in the income statement. Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary.

Segmental reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those in segments operating in other economic environments.

Foreign currency

The individual financial statements of each Group Company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group Company are expressed in Pounds sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at rates of exchange prevailing on the dates of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the profit and loss account for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such monetary items, any exchange component of the gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at exchange rates prevailing on the balance sheet date.

Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised as income and expense in the period in which the operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rates.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Sales of goods are recognised when goods are delivered and title has passed.

Sales of services are recognised when the service has been completed and invoiced to the customer.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Leased assets

Where the assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as a liability. Where a finance lease has been awarded to a group entity at a non-commercial interest rate is applied. Depreciation on the relevant assets is charged to the income statement.

All other leases are treated as operating leases. Their annual rentals are charged to the income statement on a straight line basis over the term of the lease.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

The cost of property, plant and equipment includes those costs which are directly attributable to purchasing the assets and bringing them into working condition. The Group does not capitalise interest as part of the cost of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation is provided on the following tangible fixed assets at rates calculated to write off the cost or valuation, less estimated residual value based on prices prevailing at the date of acquisition or revaluation, of each asset evenly over its expected useful life as follows:

Fixtures and fittings 25% reducing balance

Office equipment 25% reducing balance

Computer equipment 33.3% per annum

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Operating expenses’ in the Income Statement.

The Group reviews its depreciation rates regularly to take account of any changes in circumstances. When setting useful economic lives, the principal factors the Group takes into account are the expected rate of technological developments and the intensity at which the assets are expected to be used.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the acquisition date. Goodwill on acquisition of subsidiaries is included in goodwill and intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash generating units that are expected to benefit from the business combination in which the goodwill arose.

In accordance with IFRS 3 ‘Business Combinations’, any excess of acquirer’s interest in the fair value of acquiree’s identifiable net assets is immediately recognised in the income statement.

Computer software

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These costs are amortised over their useful economic lives (3 to 5 years). Costs associated with developing and maintaining computer software programmes are recognised as an expense when incurred, subject to the capitalization criteria of IAS 38.

Trade names/Domain names

Acquired trade names/domain names are recognised where their fair value can be reliably measured. These assets are considered to have finite lives and are tested annually for impairment and carried at cost less accumulated impairment losses.

Website costs

Acquired websites are capitalised where their fair value can be reliably measured. Development of these websites are also capitalised as long as there are considered generating revenues. These assets are considered to have finite lives and are amortised on a straight line basis over their useful economic lives of 3 years.

Impairment of non current assets

The carrying amount of the Group’s assets, other than deferred income tax assets, are reviewed at each

balance sheet date to determine whether there is any indication of impairment. Assets that have an indefinite economic life are not subject to amortisation and are tested annually for impairment.

If an indicator of a possible impairment is noted, the need for any asset impairment provision is assessed by comparing the carrying value of the asset against the higher of fair value less costs to sell or value in use (recoverable amount). An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the income statement. For the purposes of assessing impairment, the assets are grouped at the lowest levels for which they have separately identifiable cash flows (cash generating units).

Impairment losses recognised in the income statement in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (groups of units) and then, to reduce the carrying amount of the other assets of the unit (group of units) on a pro rata basis.

Impairment charges are included in the administrative expenses line item in the income statement, except to the extent they reverse gains previously recognised in the statement of recognised income and expenses.

Financial instruments

Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents comprise cash on hand, deposits held on call with banks and other short-term highly liquid investments with original maturities of three months or less.

Trade and other receivables

Trade receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original term of the receivable. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within ‘Operating expenses’. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to ‘Operating expenses’ within the income statement.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. Loans and receivables are initially recognised at cost, being the fair value of consideration together with any associated issue costs. After initial recognition, interest bearing loans are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated taking into account any issue costs and discount or premium on settlement.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax.

Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental costs (net of income taxes), is included in equity attributable to the Company’s equity holders

Trade payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Borrowing costs are expensed to the income statement unless used to fund a qualifying asset as described by IAS 23.

Current and deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the Group controls the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Share based payments Transactions

Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (‘equity-settled transactions’). In situations where equity instruments are issued and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured as the difference between the fair value of the share-based payment and the fair value of any identifiable goods or services received at the grant date.

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied. Where the terms of an equity-settled award are modified, the minimum expense recognised is the expense as if the terms had not been modified. An additional expense is recognised for any modification, which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Research and development costs

Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects.

Significant judgments, key assumptions and estimates

In the course of the preparation of the financial statements, the Group has made the following significant estimates:

• Estimates of the future cash flows of the Group’s subsidiaries upon which goodwill is carried, in order to arrive at whether an impairment provision is required. These have been based on each subsidiary’s budgets for 2011 and projections for 2012 and 2013 with expected growth rates and discount rates.
• Judgements made on the estimates of the useful life of property, plant and equipment, as set out in the relevant accounting policies above.

4. Operating loss

Operating loss has been arrived at after charging:
	2011	2010
	£000	£000
Staff costs (see note 5)	1,684	1,538
Depreciation of property, plant and equipment	169	201
Additional selling and distribution levy from gaming operator	224	-
Share based payment	3	6
Operating lease expenditure:
- property	31	123
Auditors’ remuneration:
- statutory audit	40	59
- Tax compliance services	3	3
Exceptional Loss	2011	2010
	£000	£000
Loss on the sale of Gambling.com	1,253	-
Impairment of Domain name	235	-
	1,488	-

5. Segmental analysis

As at 30 September 2011, the Group’s continuing business is classified by management into three main segments.

The primary segment results for the year ended 30 September 2011 are as follows:
	Advertising Network		Internet Publishing		Internet Gaming		Group
	£'000		£'000		£'000		£'000
Revenue
Total segment revenue	7,240		275		27,630		35,145
Operating Profit /(loss)	115		(1,210	)	(283	)	(1,378	)
Exceptional Loss on asset disposal/ impairment	(235	)	(1,253	)	-		(1,488	)
Operating loss after exceptional costs							(2,866	)
Net finance income							1
Loss before income tax expense							(2,865	)
Income tax expense
Loss from continuing activities							(2,865	)
Balance sheet
Assets	927		4,243		1,022		6,192
Liabilities	(1,933	)	965		(2,527	)	(3,495	)
Net assets/(liabilities)	(1,006	)	5,208		(1,505	)	2,697
Other information
Depreciation and amortisation	(30	)	(109	)	(30	)	(169	)

The segment results for the year ended 30 September 2010 are as follows:
	Advertising Network		Internet Publishing		Internet Gaming		Group
	£'000		£'000		£'000		£'000
Revenue
Total segment revenue	2,856		130		21,265		24,251
Operating loss	(40	)	(1,329	)	(35	)	(1,404	)
Net finance income							6
Loss before income tax expense							(1,398	)
Income tax expense
Loss from continuing activities							(1,398	)
Balance sheet
Assets	695		5,495		2,938		9,128
Liabilities	(478	)	(282	)	(2,680	)	(3,440	)
Net assets/(liabilities)	217		5,213		258		5,688
Other information
Depreciation and amortisation	(38	)	(145	)	(18	)	(201	)

The above disclosures are consistent with how management reports information internally for the purpose of evaluating the Group's performance and for making decisions about future allocations of resources to the Group.

Under the definitions contained in IAS 14 the only material geographic segment that the Group operates in is the UK.

6. Loss earnings per share attributable to equity holders of the company

	2011		2010
	£000		£000
Loss for the purpose of basic and diluted earnings per share	(2,865	)	(1,398	)
Numbers
Weighted average number of ordinary shares for the purpose of basic earnings per share	323,445,648		323,445,648
Effective of dilutive potential ordinary shares:
Share warrants	1,900,000		3,900,000
Weighted average number of ordinary shares for the purpose of diluted earnings per share	325,345,648		327,345,648
	Pence		Pence
Loss per share – basic	(0.87p	)	(0.43p	)
Loss per share – diluted	(0.88p	)	(0.43p	)

Basic loss per share has been calculated by dividing loss for the year by the weighted average number of ordinary shares in issue during the year.

Diluted loss per share has been calculated by dividing loss for the year by the weighted average number of ordinary shares in issue during the year adjusted to assume conversion of all dilutive potential options/warrants. Losses are not subject to dilution.

7. Share Capital

	2011	2011	2010	2010
	Number	£000	Number	£000
Allotted, called up and fully paid
Ordinary shares of 1p each	323,445,648	3,234	323,445,648	3,234
Deferred shares of 4p each	46,358,400	1,854	46,358,400	1,854
		5,088		5,088

Share warrants

No additional warrants were issued during the financial year ended 30 September 2011. Unsubscribed share warrants at the date of this financial report consist of 1.9m warrants with an excise price of 2.25p

8. Events after balance sheet date

None

9. AGM Notice and availability of accounts

The notice of annual general meeting and proxy materials will be posted to shareholders with the 2011 Annual Report and Accounts early January 2011. The AGM will be held 11am on 16 February 2012 at the offices of Northland Capital Partners Limited, 60 Gresham Street, London, EC2V 7BB. Further information will also be available from 20 January 2012 at the Company’s registered office and website, www.mediacorpplc.com.

Media Corporation Plc
Justin Drummond, [phone]
CEO
or
Nilesh Jagatia, [phone]
Group Finance Director
or
Northland Capital Partners Limited
Luke Cairns / Rod Venables, + 44 20 7796 8800
Nomad
or
Katie Shelton, + 44 20 7796 8800
Joint Broker
or
XCAP Securities
John Grant/Karen Kelly, + 44 207 101 7070
Joint Broker
or
Bishopsgate Communications
Deepali Schneider/Natalie Quinn, + 44 20 7562 3350
[e-mail]

Category Code: ACS

Sequence Number: 308908

Time of Receipt (offset from UTC): 20120116T184330+0000